The Trump administration’s chaotic tariff policies continue to fuel uncertainty in the business world, igniting debates about protectionism, global trade, and economic strategy.
These policies come at a critical juncture for several U.S. industries, as globalization and intricate international supply chains leave businesses more interconnected than ever before. As companies brace for change, it is becoming increasingly clear that these tariffs have the potential to alter the fortunes of various U.S. industries.
From semiconductors and pharmaceuticals to steel companies and agricultural producers, the impact could be profound. Let’s take a closer look at the industries set to gain and those which stand to suffer, and how tariff policy could alter the economic landscape.
Industries that could face challenges
The Trump administration’s tariff policies, aimed at addressing trade imbalances and protecting domestic industries, have had significant repercussions for sectors like semiconductors and electronics, pharmaceuticals, and agriculture. These industries share common traits that make them particularly vulnerable to tariffs: global supply chain dependency, reliance on international markets, and sensitivity to cost fluctuations.
Semiconductors and electronics
Semiconductor manufacturing, one of the crown jewels of American innovation, rivals oil & gas in its importance to international relations. The industry relies on intricate global supply chains where components are sourced and assembled across multiple countries. However, proposed tariffs targeting high-tech imports like integrated circuitry and related electronics could disrupt this vital sector.
The U.S. chip industry relies heavily on raw materials, components, and assembly labor from nations such as Taiwan, South Korea, and China.1 Disruption at any point in this chain could lead to higher production costs.
Notably, some large US companies have already faced pressure from existing tariffs. With tariffs potentially increasing another 25%, existing issues will be compounded and threaten the United States’ position as the global leader in semiconductor manufacturing.
Exacerbating the problem, retaliatory tariffs from China could make American-made chips less competitive in overseas markets, fueling further losses. Meanwhile, some European firms, such as the top maker of chip manufacturing equipment, have signaled possible slowdowns due to trade tensions. The interconnected nature of semiconductor production could amplify challenges for U.S. firms.
Pharmaceuticals
Pharmaceuticals traditionally perform well during periods of economic uncertainty since demand for lifesaving medications tends to be price inelastic, meaning that changes in price have little impact on demand.2
However, dependence on global supply chains has surfaced as a shared vulnerability with the broader manufacturing sector. This dependency, combined with potential tariffs on crucial imports, puts even established, resilient industries like pharmaceuticals in uncharted territory.
The Trump administration has hinted at imposing sizable tariffs on imported pharmaceutical component compounds, particularly those coming from India and China. Given that nearly 88% of active pharmaceutical ingredients (APIs) used in U.S.-produced drugs are imported, this could spell trouble.3
Consumers and businesses alike may see drug prices rise. Smaller pharmaceutical firms could be hit particularly hard as they struggle to absorb or offset these hikes, potentially increasing industry consolidation over time. Even more troubling, patients reliant on life-saving drugs could face difficulties in affording essential medications.
Agriculture
Agriculture is deeply tied to export markets, with products like soybeans, pork, and dairy heavily reliant on foreign buyers. It is one of the most politically sensitive sectors in tariff discussions, yet it is dangerously vulnerable to retaliatory trade measures.
In 2018, President Trump imposed multiple rounds of tariffs on China, and the ensuing trade war resulted in $27.2 billion in agricultural export losses.4 The likely reintroduction of steep duties on agricultural exports—either directly or as retaliatory measures—could hit the sector hard.
China, Brazil, and the European Union (all major buyers of American soybeans, pork, dairy, and corn) have announced or hinted at reciprocal tariffs on U.S. agricultural goods. For instance, Brazilian President Luiz Inácio Lula da Silva recently announced the possibility of a 50% reciprocal tariff on U.S. imports.5 This would make it increasingly difficult for U.S. farmers to compete in international markets.
Further complicating the picture, tariffs on imported agricultural equipment like tractors and fertilizers—many of which are sourced from Europe—could drive up farmers’ costs. The risk of unsold surpluses, declining farm revenues, and rising input costs places the agricultural industry at significant risk of long-term contraction.
Steel and aluminum
Steel and aluminum, two industries that are often the poster children for protectionist tariffs, are likely to face renewed volatility. While the Trump tariffs aim to protect domestic producers, the reality is more complex.
Rising costs for imported raw materials due to retaliatory measures could undermine manufacturers who rely on steel and aluminum, such as those in the automotive and construction sectors.
Additionally, many nations, including Canada and members of the European Union, have already announced counter-tariffs on American steel and aluminum products.6 This could close off key export markets, and harm producers who have successfully penetrated the global market.
Apparel and consumer goods
The apparel and footwear industries are expected to suffer as well. The Budget Lab at Yale University estimates that tariffs will have a disproportionate effect on clothing and textiles, with consumers seeing footwear prices rise by as much as 40% and clothing by 36%.7
Moreover, many large manufacturers depend on low-cost production facilities in countries like Vietnam and China. A wave of new tariffs on imports would likely leave manufacturers with no choice but to raise retail prices.
With clothing and shoes typically more price elastic, tariffs could result in diminished consumer spending on apparel. Adapting to the new tariffs could also lead to production relocation, but establishing alternative supply chains is an expensive and lengthy process.
Industries poised to benefit
Just as some industries face negative consequences from the administration’s tariff policies, other sectors will benefit from a more favorable environment.
These industries share a common reliance on domestic production and a competitive advantage in the global market when foreign imports are restricted. By imposing tariffs on imported goods, the administration effectively raises the cost of foreign competition, incentivizing consumers and businesses to source products locally.
These industries are also of strategic importance to national security, economic stability, and self-sufficiency, contributing to the protectionist orientation. Moreover, these sectors tend to be centered in politically significant regions where support for protectionist policies is traditionally high.
Raw material producers
Domestic producers of raw materials like steel and aluminum could anticipate some short-term relief. Tariffs have the potential to bolster domestic extraction and production by reducing reliance on formerly cheaper imports, supporting local employment and investment.
For instance, U.S.-based producers could see demand rise as imported materials become prohibitively expensive.
However, this benefit will likely come at the expense of industries that rely on affordable raw materials. Automakers and appliance manufacturers, for instance, have criticized similar policies in the past for contributing to increased production costs, which are inevitably passed on to consumers.
Domestic agriculture suppliers
While U.S. farmers are likely to suffer from declining export markets, domestic agricultural input industries could gain as tariffs on agricultural goods make U.S.-grown products more competitive on price, fostering demand for homegrown crops and livestock.
Moreover, as imports of fertilizers, seeds, and machinery face higher tariffs, domestic manufacturers may see a momentary uptick in demand.
Energy and petrochemicals
Energy and petrochemical industries appear poised to benefit, particularly if tariffs focus on limiting imports from oil-producing nations. Domestic drillers and refineries, like those in Texas and Pennsylvania, could gain a competitive edge as reliance on local production intensifies.
The U.S. chemical industry could also see certain advantages, given its deep ties to the domestic energy sector. However, as demonstrated by retaliatory threats from the E.U. and Brazil targeting chemical exports, these benefits could be muted by shrinking foreign markets.
Long-term implications for global markets
The industrial shifts triggered by tariffs are likely to be compounded by retaliatory measures from major trade partners. Over $117 billion in U.S.-made goods were identified by the European Union as potential targets for reciprocal tariffs.8
However, on July 26, 2025, the U.S. and European Union finalized a trade deal that is likely to bring relief to a number of sectors. The agreement eases existing tariffs on some industrial goods and agricultural exports, including soybeans and dairy.9
For agriculture in particular, the deal opens access to a previously waning European market, offering a lifeline for farmers facing retaliatory actions elsewhere. The deal also included a mutual reduction in tariffs on steel and aluminum, which could give a boost to U.S. producers by ensuring consistent access to European markets. European machinery manufacturers will also benefit, which could potentially reduce some costs to American farmers.
While the agreement is a positive step, China, Brazil, and other nations have also warned of aggressive action. This tit-for-tat dynamic has the potential to escalate into a full-scale trade war, driving up costs for consumers worldwide.
The takeaway
While some sectors may see short-term protection from imports, the longer-term outlook is fraught with risks. Protectionism can result in inefficiencies, price hikes, and reduced global competitiveness. For export-focused industries, the loss of access to foreign markets could have devastating effects over time.
The interconnectedness of modern supply chains means that even protected industries are susceptible to negative impacts from tariffs. For businesses and policymakers, the challenge lies in mitigating the adverse effects while leveraging the opportunities that protectionism could create. Whether these policies ultimately rejuvenate the U.S. economy or create more harm than good remains to be seen.
Challenges remain pervasive across the economic landscape, but the U.S.-Europe trade deal signals that diplomacy has the power to soften the negative impact of protectionist policies. Significant uncertainty remains, particularly given the administration’s often quixotic approach to trade policy. However, the latest trade deal offers a glimmer of hope amid broader uncertainty.
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